Business: Chapter 18

  1. Banker’s Acceptance
    a written order for a bank to pay a third party a stated amount of money on a specific date
  2. Barter System
    a system of exchange in which goods or services are traded directly for other goods or services
  3. Certificate of Deposit (CD)
    a document stating that the bank will pay the depositor a guaranteed interest rate on money left on deposit for a specified period of time
  4. Check
    a written order for a bank or other financial institution to pay a stated dollar amount to the business or person indicated on the face of the check
  5. Collateral
    real estate or property pledged as security for a loan
  6. Commercial Bank
    a profit-making organization that accepts deposits, makes loans, and provides related services to its customers
  7. Credit
    immediate purchasing power that is exchanged for a promise to repay borrowed money, with or without interest, at a later date
  8. Credit Union
    a financial institution that accepts deposits from and lends money to only those people who are its members
  9. Debit Card
    a card that electronically subtracts the amount of your purchase from your bank account at the moment the purchase is made
  10. Demand Deposit
    an amount on deposit in a checking account
  11. Discount Rate
    the interest rate the Federal Reserve System charges for loans to member banks
  12. Electronic Check Conversion (ECC)
    a process used to convert information from a paper check into an electronic payment for merchandise, services, or bills
  13. Electronic Funds Transfer (EFT) system
    a means of performing financial transactions through a computer terminal or telephone hookup
  14. Federal Funds Rate
    the interest rate at which a bank lends immediately available funds to another bank overnight in order to meet the borrowing bank’s reserve requirements
  15. Federal Reserve System
    the central bank of the United States responsible for regulating the banking industry
  16. Letter of Credit
    a legal document issued by a bank or other financial institution guaranteeing to pay a seller a stated amount for a specified period of time
  17. Line of Credit
    a loan that is approved before the money is actually needed
  18. Measure of Value
    a single standard or “yardstick” used to assign values to and compare the values of products, services, and resources
  19. Medium of Exchange
    anything accepted as payment for products, services, and resources
  20. Money
    anything a society uses to purchase products, services, or resources
  21. National Bank
    a commercial bank chartered by the U.S. Comptroller of the Currency
  22. NOW Account
    an interest-bearing checking account; NOW stands for negotiable order of withdrawal
  23. Open-Market Operations
    the buying and selling of U.S. government securities by the Federal Reserve System for the purpose of controlling the supply of money
  24. Reserve Requirement
    the percentage of its deposits a bank must retain, either in its own vault or on deposit with its Federal Reserve district bank
  25. Revolving Credit Agreement
    a guaranteed line of credit
  26. Savings and Loan Association (S&L)
    a financial institution that offers checking and savings accounts and CDs and that invests most of its assets in home mortgage loans and other consumer loans
  27. State Bank
    a commercial bank chartered by the banking authorities in the state in which it operates
  28. Store of Value
    a means of retaining and accumulating wealth
  29. Time Deposit
    an amount on deposit in an interest-bearing savings account
Card Set
Business: Chapter 18
Business: Chapter 18